Michael Jordan: The Original Brand Ambassador!
25th February, 2013
On February 17th 2013 Michael Jordan, one of sport’s great personalities, turned 50. Not only is ‘Mike’ a sports legend but also the face of arguably the most successful brand endorsement deal of all time. Due to the recent headlines involving sports stars such as Oscar Pistorius and Lance Armstrong the value of brand ambassadors is being questioned more than ever (see Mark Mylam’s blog). Michael Jordan’s sponsorship deal with Nike however, proves what kind of positive impact such an agreement can have for both the brand and the celebrity. Let’s recap this incomparable success story:
“The 1984 Olympics was Michael Jordan’s coming out party” describes his agent David Falk. Up until this point Michael Jordan had not even played a single game in the NBA and yet at the time top three major basketball shoe brands Adidas, Converse and Nike were after him. Before his NBA career even started Jordan already knew who he wanted to partner with – Adidas. The German sports brand and Converse were the leading shoe suppliers for the NBA stars in the mid and late 80’s. Michael Jordan himself had never worn any Nike basketball shoes before and was convinced by the quality of Adidas’ products but the first brand that Michael Jordan met with was Converse. During this pitch Jordan mentioned his worries about the endorsement deals that Converse already had in place with superstars like Magic Johnson or Larry Bird and asked: “With all these stars, where do I fit into the conversation?” John O’Neil, the president of Converse, took that question and replied: “We’ll treat you like all our other superstars.” This is obviously not the answer that the upcoming star wanted to hear and the $100,000 per year that Converse offered him could not change his mind either.
The next invitation that Michael Jordan received was from Nike, however he was not interested in what they had to tell him and declined this invitation at first. In the end it was Jordan’s mother who convinced him to at least listen to what Nike had to offer so he took the plane and the rest, as they say, is history. Nike decided to spend all of its marketing budget on Jordan and offered him a five-year deal worth $500,000 annually plus royalties; five times as much as any other NBA superstar was receiving at the time. It wasn’t only the sound of the money that made Nike suddenly attractive to Jordan: Nike offered Jordan his own signature shoe line. This is the kind of special treatment that Converse didn’t offer Michael and as a result they were out of the running.
However Adidas was still in the race – Jordan’s “favourite shoe”. If Adidas could have matched what Nike put on the table then Michael would have teamed up with the German brand. However Adidas missed out on this opportunity and this mistake became known as one of the worst business decisions in the last 50 years. “They didn’t feel it was worth it,” said Jordan. “Which in hindsight is perfect for me, because it made my decision much easier. And I ended up with Nike, and it became a great relationship.”
The Jordan brand was born (with the jumpman logo appearing in 1987). Since 1984 Nike’s subsidiary coproduced 27 basketball shoes with Michael Jordan. Last year, the U.S. Jordan Brand sneaker business alone had $1.25 billion in wholesale revenue. Although Michael Jordan himself isn’t playing anymore there are still active NBA players (Carmelo Anthony, Blake Griffin, Chris Paul etc.) acting as Air Jordan ambassadors and supporting the brand’s huge success within the basketball industry. Whereas in the mid and late 80’s Converse and adidas were dominating the U.S. basketball shoe market, 30 years later it is the Jordan brand that is controlling 58% of it, followed by its parent company Nike (34%), adidas (5.5%), Reebok (1.6%) and Under Armour (0.6%).
Michael Jordan himself is still earning more than $80 million per year through corporate sponsorship deals and the majority of this income is related to his partnership with Nike. The current details of this deal are a well kept secret but royalties now generate more than $60 million annually for MJ, according to a Forbes article.
You can buy yourself a lot of nice Birthday presents with that amount of money – Congratulations Michael! But also, congratulations Nike!